16 May 2018, Amsterdam – European non-listed real estate continues to perform well for investors, according to the recently published 2018 INREV Annual Index. The All Funds Index delivered a total return of 9.40% over 2017, up from 5.99% in 2016.
The impressive returns were boosted by a jump in capital growth, from 2.39% to 5.51%. Distributed income returns also saw gains to 3.88% from 3.59%.
Significant gains in key markets
Finnish and Dutch funds posted the highest returns of all single country funds with 15.98% and 14.65% respectively. German funds delivered returns of 9.22%; while French funds saw a decline in performance – down from 10.29% in 2016 to 7.34% in 2017. Anecdotally, this dip in performance may be a reflection of the French market being unable to capitalise on a potential Brexit bounce and capture the anticipated volume of capital outflows from the UK, which didn’t occur.
Shaking off Brexit fears, the UK delivered a startlingly robust performance, with annual returns of 9.78% – a substantial uplift from 2.24% in 2016. Despite an initial wobble from investors immediately post-Brexit, continued interest in the UK market from overseas investors contributed to this marked rebound.
Overall as a region, western Europe witnessed the biggest gains with a sizeable leap from 5.65% to 10.08% – one of only two regions to deliver double digit returns. The other was the Nordics where, even with a strong performance of 10.29%, returns were down on the previous year’s achievement of 12.07%.
Logistics/Industrial investment almost doubles
Despite a marginal dip in fortunes, the residential sector continued to prove its worth posting significant returns of 15.08% – slightly down from the high of 15.78% reached in 2016; but still ahead of all other sectors.
Hot on its heels, was the industrials / logistics sector, which made huge gains in 2017 almost doubling from 7.38% to 14.57%.
Multi-sector funds, saw an equally impressive percentage increase though at a lower actual level, moving up from 4.41% in 2016 to 8.32% in 2017.
Commenting on the findings, Lonneke Löwik INREV’s CEO, stated: ‘The results show the continuing attraction and reliability of the European non-listed real estate sector. Investors will no doubt be eager for more of the same in the months ahead, as they continue to allocate capital to this region and into this asset class.’
– Ends –
For further information, please contact:
Johlyn da Prato, johlyn.da.prato@inrev.org, +31(0)621397456
Justin St Clair-Charles, inrevteam@firstlightpr.com | +44 (0) 7769 644 059
Jack Rodgers, inrevteam@firstlightpr.com | +44 (0) 7580 427 746
Notes to Editors
About the Annual Index
The INREV Annual Index measures the performance of non-listed real estate funds, net of fees and costs.
The INREV Annual Index was launched in 2004 and includes historical data from 2001. Only core and value added funds are included. All returns are in local currency, which means that exchange rate fluctuations have been stripped out. The Index is frozen, so historical results will not be restated in future publications.
The index included 354 funds representing total NAV of € 226.1 billion as at end 2017
About INREV
INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, was launched in May 2003 as a forum for investors and other participants in the growing non-listed real estate vehicles sector. The association represents and reflects an industry with a total value of €2.1 trillion and INREV members deliver €300 billion of stimulus to the real economy of Europe.
INREV has 416 members which include 75 of the largest institutional investors as well as 40 of the 50 largest real estate fund managers, plus banks and advisors across Europe and elsewhere.
The non-profit association is focused on increasing the transparency and accessibility of non-listed vehicles, promoting professionalism and best practice, and sharing knowledge. It is based in Amsterdam, the Netherlands.